Suarez Corporation Industries files for bankruptcy

Company founder and CEO Benjamin Suarez predicts the business will emerge from its financial woes bigger and better.

Ed Balint CantonRep.com staff writer @ebalintREP

Suarez Corporation Industries has filed for federal bankruptcy protection amid a wave of lawsuits from creditors and in the aftermath of a federal court case that sent its founder to prison.

The Jackson Township-based SCI owes dozens of creditors, according to documents filed Monday in U.S. Bankruptcy Court in Canton.

The company listed debts between $10 million to $50 million and assets of $500,000 and $1 million, according to the filings.

Company CEO Benjamin Suarez said brighter days are ahead.

Citing similar moves by General Motors and President Donald Trump, Suarez predicted his business will likely emerge "bigger and better than before and create many new jobs."

SCI filed for chapter 11 reorganization bankruptcy and will continue operations as usual, Suarez said in a statement. This type of bankruptcy filing usually proposes a plan of reorganization to keep a business alive and pay creditors over time.

Suarez, when reached by phone, said that he had delayed bankruptcy as long as he could but he "just couldn't put it off any longer due to capital requirements to get inventory and do rollouts (of new products) and (pay for) costs to do media ... direct mail and online advertisements."

In the court filing, Suarez's attorneys said the business suffered because of the 2008-2009 economic recession, but "as (SCI) started to recover in 2011, the federal government initiated an extensive investigation of alleged federal campaign finance law violations."

The federal investigation resulted in an indictment against both Suarez and his company. Following a trial in June 2014, a jury convicted Suarez of obstruction of justice by witness tampering. He was sentenced to 15 months in a federal prison work camp and served the last three months on home confinement.

Jurors cleared SCI of all charges and acquitted Suarez of seven counts related to campaign finance laws and allegations of obstructing justice and causing false statements. The single conviction involved what federal prosecutors said was Suarez's attempt to influence the grand jury testimony of a former SCI employee.

Suarez has fought his lone conviction but numerous appeals have been unsuccessful.

"SCI (following the economic downturn) simply has not been able to financially recover from the significant expense and major distraction of the ... federal investigation and indictments, compounded by Mr. Suarez's lengthy absence from the business during his incarceration, unfortunately leaving it and its related entities insolvent and with no option other than bankruptcy to preserve its business and assets," his attorneys wrote in court filings.

Suarez on Monday described SCI as a "multi-product, multi-channel marketing company; we sell a diverse line of products." The EdenPURE line of home appliances is the main product, he said. Other products include jewelry and exercise equipment.

Calls federal investigation 'witch-hunt'

Suarez's statement aired a variety of grievances, blaming the administration of President Barack Obama for sinking the economy and federal prosecutors for what he still maintains vehemently was a wrongful prosecution of the entrepreneur and his business, declaring the investigation a "witch-hunt." Suarez later said that Obamacare (the Affordable Care Act) and regulations under the former president's watch crippled his business and many others across the country.

Suarez praised President Donald Trump and said his economic policies will positively impact SCI and the national business climate in general.

Suarez said SCI employs more than 120 people at 7800 Whipple Ave. NW, a steep decline from about 1,000 workers a few years ago. The executive said that SCI sales plummeted to nearly zero when he was incarcerated. He said he invents and promotes products and is responsible for about 80 percent of the company's sales.

"When I was in (prison) camp, just everything went to hell," Suarez said.

The business mogul also accuses some of his company's suppliers of defrauding SCI at a time when the company was distracted and disrupted by the federal probe. "We are going to pay the creditors who deserve to be paid but not the people who defrauded us," Suarez said.

New products, including modifications and enhancements to SCI's EdenPURE line, will help boost the company's profits and increase employment levels, he said.

The bankruptcy filing says Suarez's business started at his home in 1968 and struggled initially before evolving into a multimillion-dollar enterprise over the decades. In 2008, SCI achieved a sales peak of $400 million.

'Low-capital situation'

Additional legal costs also have mounted in defending SCI against a multitude of lawsuits, including from creditors.

Owners of the Hoover complex in North Canton are seeking more than $1.83 million in back rent and utilities from SCI. Maple Street Commerce, the partnership operating the Hoover complex, filed a lawsuit in May seeking unpaid rent, costs for water, electric and fuel and other charges, along with late fees. The suit also seeks legal fees. Suarez has said he will contest that lawsuit, one of several filed against him in 2017 for unpaid bills.

Suarez said he won't retire and is committed to his company. A new management team is in place at SCI, he said. Reorganization of the company already was underway prior to the bankruptcy filing, Suarez said.

"I predict eventually, that after we get out of this low-capital situation, we are going to come back much bigger than before."